Dr. Reddy's Laboratories (EU) Limited - Limited company accounts 20.1
Dr. Reddy's Laboratories (EU) Limited - Limited company accounts 20.1
| REGISTERED NUMBER: 02177715 (England and Wales) |
| Group Strategic Report, |
| Report of the Directors and |
| Consolidated Financial Statements |
| for the Year Ended 31st March 2021 |
| for |
| Dr. Reddy's Laboratories (EU) Limited |
| Dr. Reddy's Laboratories (EU) Limited (Registered number: 02177715) |
| Contents of the Consolidated Financial Statements |
| for the year ended 31st March 2021 |
| Page |
| Company Information | 1 |
| Group Strategic Report | 2 |
| Report of the Directors | 7 |
| Report of the Independent Auditors | 9 |
| Consolidated Statement of Comprehensive Income | 13 |
| Consolidated Balance Sheet | 14 |
| Company Balance Sheet | 15 |
| Consolidated Statement of Changes in Equity | 16 |
| Company Statement of Changes in Equity | 17 |
| Consolidated Cash Flow Statement | 18 |
| Notes to the Consolidated Cash Flow Statement | 19 |
| Notes to the Consolidated Financial Statements | 20 |
| Dr. Reddy's Laboratories (EU) Limited |
| Company Information |
| for the year ended 31st March 2021 |
| DIRECTORS: |
| SECRETARY: |
| REGISTERED OFFICE: |
| REGISTERED NUMBER: |
| AUDITORS: |
| Statutory Auditors |
| Princes House |
| Wright Street |
| Hull |
| East Yorkshire |
| HU2 8HX |
| BANKERS: | Bank of Scotland |
| Aldgate House |
| 1/4 Market Place |
| Hull |
| HU1 1RA |
| Dr. Reddy's Laboratories (EU) Limited (Registered number: 02177715) |
| Group Strategic Report |
| for the year ended 31st March 2021 |
| The directors present their strategic report of the company and the group for the year ended 31st March 2021. |
| REVIEW OF BUSINESS |
| The key financial highlights are as follows: |
| 2021 | 2020 | 2019 | 2018 |
| £ | £ | £ | £ |
Turnover - United Kingdom |
34,142,159 |
30,497,887 |
21,445,624 |
35,435,797 |
| Turnover growth - United Kingdom | 11.9% | 42.2% | -39.5% | 9.7% |
| Turnover - Europe and other countries | 23,906,677 | 30,710,593 | 32,523,068 | 36,545,275 |
| Turnover growth - Europe and other countries | -22..1% | -5.6% | -11.0% | 0.1% |
Profit before tax |
7,540,357 |
11,722,031 |
12,704,240 |
16,576,738 |
Profit before tax margin |
12.9% |
19.2% |
23.5% |
23.0% |
| The FY21 sales for Dr Reddy's Laboratories (EU) Limited has decreased 5.2% from £61,208,480 to £58,048,836 mainly in API segment of our business. |
| Global generics segment continues to grow year on year in terms of turnover. After previous strong years in our branded products this year saw a sharp decline due to much lower cost generics. However, this was more than supplemented by excellent sales through the hospital channel with both tender wins and off contract sales. In the retail channel we continue to grow and develop our relationships with key customers. We have increased our range selling at increased but responsible prices. Our stronger supply chain has also allowed us to be less boom and bust on products and maintains to forecast in certain areas. Turnover in our API segment has decreased due to reduction in key product volumes for customers in North America and Europe. |
| Dr. Reddy's Laboratories (EU) Limited (Registered number: 02177715) |
| Group Strategic Report |
| for the year ended 31st March 2021 |
| PRINCIPAL RISKS AND UNCERTAINTIES |
| The group has identified the principal areas of risk that it faces as: |
| Financial instrument risk |
| The group has established a risk and financial management framework whose primary objectives are to protect the group from events that hinder the group's performance objectives. The objectives aim to ensure sufficient working capital exists and monitor the management of risk at a business unit level. |
| Impact of pharmaceutical regulations |
| The group is subject to various regulations and any tightening of these could have a negative impact on earnings. |
| Price risk |
| The group sells active pharmaceutical products. The prices of such products tend to reduce on account of severe pricing pressure and competition. This risk is managed by maintaining adequate levels of stock and introducing new products. |
| Foreign exchange risk |
| The group sells and purchases some products in foreign currencies. The risk is mitigated by monitoring foreign exchange rates on a daily basis and taking foreign exchange cover, if required. |
| Credit risk |
| Credit checks are carried out on all customers. Amounts outstanding for both time and credit limits are regularly monitored. The group has little experience of material bad debts in general. |
| Liquidity risk |
| Liquidity is the risk that the group will encounter difficulty in meeting obligations associated with financial liabilities. The group manages its cash flow to ensure that sufficient liquid resources are available to meet its operating needs. |
| Interest rate and cash flow risk |
| The group had a favourable cash balance during the year and therefore does not consider that interest rates or cash flow pose a significant risk. |
| Dr. Reddy's Laboratories (EU) Limited (Registered number: 02177715) |
| Group Strategic Report |
| for the year ended 31st March 2021 |
| SECTION 172(1) STATEMENT |
| The Board of Directors, in line with their duties under s172 of the Companies Act 2006, act in a way they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole, and in doing so have regard to a range of matters when making decisions for the long term. Key decisions and matters that are of strategic importance to the Company are appropriately informed by s172 factors. |
| At Dr. Reddy's, our Board of Directors, management and employees are committed to upholding high standards of corporate governance and business ethics. We firmly believe that timely disclosures, transparent accounting policies, rigorous internal control systems and a strong and independent Board go a long way in preserving shareholder trust while maximising long-term shareholder value. |
| This s172 statement explains how the Dr. Reddys Directors: |
| - Have engaged with employees, suppliers, customers and others; and |
| -Have had regards to employee interests, the need to foster the company's business relationships with suppliers, customers and others, and the effect of that regards, including on the principal decisions taken by the company during the financial year. |
| The s172 statement focuses on matters of strategic importance to Dr. Reddys, and the level of information disclosed is consistent with the size and the complexity of the business. |
| General confirmation of Directors' duties |
| Dr. Reddys have a number of Committees appointed by the Board at group level to focus on specific areas and take informed decisions within the framework of delegated authority, and make specific recommendations to the Board. All decisions and recommendations of the committees are placed before the Board for information or for approval. |
| When making decisions, each Director ensures that they act in the way they consider, in good faith, would most likely promote the Company' success for the benefit of its members as a whole, and in doing so have regard (among matters) to: |
| The likely consequences of any decision in the long term |
| The Directors understand the business and the demand to innovate the latest products in order to find the most effective treatments in the pharmaceutical market. Dr. Reddy's vision and goal of 'Good Health Can't Wait' is what the business drives and strives for. The strategy set by the Board as a leader in the pharmaceutical industry is to ensure good health can be delivered to those who need it, and to promote wellness among them. |
| Whilst investing for the future, the Board also recognises that we must focus on meeting the current supply and demand of pharmaceuticals. |
| The Directors are guided by our principles - Empathy and Dynamism - which provide both guidance for our current behaviour and inspiration for our future actions. |
| The interests of the company's employees |
| At Dr. Reddy's employees are at the heart of our business. The Management team invites a fair and open two way relationship with all employees. We believe in respecting every individual, regardless of position. At Dr Reddy's employees are heard and have the opportunity to express their opinion. Organisation believes in equality and discourage any discrimination based on any caste, creed, race, religion age and gender etc. We are committed to employee's safety and well-being. Our HR policies are well documented and available to each employee. Management assumes responsibility that such policies are adhered to. |
| The talented and capable people have played a major role in powering and defining the growth of Dr. Reddys. We believe that when people with diverse skills are bound together by a common purpose and value system, they can make magic. |
| The need to foster the company's business relationships with suppliers, customers and others |
| Customers and suppliers are the key stakeholders in our business. In a competitive price driven environment, stock is the vital component at the keenest price. We engage in regular communication with our suppliers as well as customers. We recognise the fact that the stronger the relationships with suppliers the more we are able to serve our customers better. We remain committed to all our stakeholder for ethical business practices. The Company has put in practice a code of business conduct and ethics (CoBE) , every employee at Dr Reddy's is required to sign an undertaking, at least annually, that they have read such code and comply with its principles. |
| Dr. Reddy's Laboratories (EU) Limited (Registered number: 02177715) |
| Group Strategic Report |
| for the year ended 31st March 2021 |
| The impact of the company's operations on the community and environment |
| At Dr. Reddy's, Good Health Can't Wait is not just a slogan. But a belief that guides our thoughts, our behaviour and our actions. There are a number of initiatives that we've taken- from product development to patient management to helping doctors and partners delivers good health to patients. |
| Some of these were-life changing, for the patients. Like creating affordable option of complex, difficult to make medicines. |
| All of this is aimed at: |
| - Bringing good health to the community via innovative R&D, active pharmaceutical ingredients supply to Pharma industries and contribute in to overall community health system. The company strives to ensure that it focused on the larger community. |
| - All of this is aimed of bringing good health to the community directly via the retail market or via being part of the supply chain to the NHS.The company is striving to ensure that the company is focused on the larger community. |
| The desirability of the company maintaining a reputation for high standards of business conduct |
| Dr. Reddys Board periodically reviews their Corporate Governance requirements as the commitment to upholding the highest standards are set at board level but is filtered down throughout the whole group organisation. |
| The need to act fairly as between members of the company |
| The Directors consider and focus its attention to ensure that the company's performance is in line with their strategic vision for both the short and long term objectives. The impact of this on all of the stakeholders is reviewed. The Directors believe they act fairly. |
| The Board has created a culture of honesty, integrity and respect of the Dr. Reddys core values and principles. The company that has set a number guidelines on Code of Business Conduct and Ethics (COBE) through to various Environment and Employment policies. |
| Principal decisions |
| We define principal decisions taken by the Board as those decisions in 2020/21 that are of a strategic nature and that are significant to any of our key stakeholder groups. As outlined in the FRC Guidance on the Strategic Report, we include decisions related to capital allocation and dividend policy. |
| REVIEW OF CLOSING POSITION |
| Overall Dr Reddy's Laboratories (EU) Limited finds itself in a good financial position at the close of financial year 2020-21with a cash reserve of £2.7mn, which is higher than previous year by £0.5mn, and a positive net current asset. |
| During the year the sales have decreased for known reasons but remains in line with expectations. The company has a healthy before tax margin. Such results are reflected accordingly in company's balance sheet. Dr Reddy's Laboratories (EU) Ltd net assets stands £63.6mn , an increase of £5.7mn, in comparison to the previous year. During the year interest income has increased marginally by £155K, reason being incremental loan to the immediate parent company during the year. The group remains well profitable though before tax margins have decreased from 19% to 13% in FY 21 in comparison with last year. |
| Dr. Reddy's Laboratories (EU) Limited (Registered number: 02177715) |
| Group Strategic Report |
| for the year ended 31st March 2021 |
| FUTURE DEVELOPMENTS |
| The manufacturing side has a portfolio of good stable products. Company expects that such portfolio will continue generating revenue in foreseeable future. However, the existing business is now maturing with its impact on revenues being visible, efforts need to be made to secure new growth business to supplement it. This new business will be a mixture of internal supply to parent company and external direct to customers. There are also products in development that are progressing well towards commercialisation. The primary activity of the R&D site is to undertake work on internal projects for its parent company Dr Reddy's laboratories Limited. These projects are typically complex and underpinned by in-house expertise and technology. Future manufacture of some of these products will be in its own manufacturing facilities and for others it will be within its parent company's assets. The company has continued to invest in development of new technology both through its own internal resources and through collaborations. This technology will be utilised in new internal projects. With Covid 19 hitting the world and our industry in February/March 2020, the current year is uncertain and challenging. Dr Reddy's Laboratories will continue to monitor the situation across all areas of business identifying potential risk and plan for any mitigation. We also continue to launch new product in in 2020/21 and continue to grow our relationships with our customers and other stakeholders. |
| ON BEHALF OF THE BOARD: |
| Dr. Reddy's Laboratories (EU) Limited (Registered number: 02177715) |
| Report of the Directors |
| for the year ended 31st March 2021 |
| The directors present their report with the financial statements of the company and the group for the year ended 31st March 2021. |
| PRINCIPAL ACTIVITY |
| The principal activity of the group in the year under review was that of manufacturing and distributing pharmaceutical products. |
| DIVIDENDS |
| No dividends will be distributed for the year ended 31st March 2021. |
| RESEARCH AND DEVELOPMENT |
| The group is currently involved in the research and development of routes to manufacture active pharmaceutical ingredients, in particular complex and chiral products. |
| FUTURE DEVELOPMENTS |
| Details of the group's future developments have been provided in the strategic report. |
| DIRECTORS |
| The directors set out in the table below have held office during the whole of the period from 1st April 2020 to the date of this report unless otherwise stated. |
| Other changes in directors holding office are as follows: |
| The directors shown below were in office at 31st March 2021 but did not hold any interest in the Ordinary shares of £1 each at 1st April 2020 (or date of appointment if later) or 31st March 2021. |
| FINANCIAL INSTRUMENTS AND RISK MANAGEMENT |
| The group's principal financial instruments comprise bank balances, trade debtors and trade creditors. The main purpose of these instruments is to raise funds and finance the group's operations. |
| Revenue maintenance |
| The group actively markets and manages its portfolio of products to focus on revenue building and maintenance which, over the life cycle of the products can contribute to the future profits of the business. |
| Risks and uncertainties |
| These details have been provided in the group's strategic report. |
| ENVIRONMENTAL REPORTING GUIDANCE - STREAMLINED ENERGY AND CARBON REPORTING |
| Dr Reddy's is a responsible corporate towards managing our climate impact within and beyond our sphere of influence. Under the ESOS scheme we have commissioned a full survey of the energy saving opportunities on our manufacturing site and was reviewed favourably by the inspectors from the Environment Agency. However, during the reporting year the company's total power consumption has slightly increased by 7% with total energy consumption in 2021 being KWH 17,060,316. Where for year 2020 such energy consumption was KWH 15,842,802. The increase in power is result of variation in the production cycles and site activities. |
| ENGAGEMENT WITH EMPLOYEES |
| These details have been provided in the company's section 172(1) statement which is included in the strategic report. |
| ENGAGEMENT WITH SUPPLIERS, CUSTOMERS AND OTHERS |
| These details have been provided in the company's section 172(1) statement which is included in the strategic report. |
| Dr. Reddy's Laboratories (EU) Limited (Registered number: 02177715) |
| Report of the Directors |
| for the year ended 31st March 2021 |
| STATEMENT OF CORPORATE GOVERNANCE ARRANGEMENTS |
| Dr. Reddy's Laboratories (EU) Limited believes that timely disclosures, transparent accounting policies coupled with a strong board go a long way in maintaining good corporate governance, preserving all stakeholders' trust and maximizing long-term corporate value. The company's corporate governance framework is based on the following main principles: Ethical business conduct by the board, management and employees. Well-developed systems of internal controls, Compliance to applicable local and international laws and financial reporting. Protection and facilitation of all stakeholders' rights. Adequate, timely and accurate disclosure of all material operational and financial information to relevant stakeholders. |
| STATEMENT OF DIRECTORS' RESPONSIBILITIES |
| The directors are responsible for preparing the Group Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations. |
| Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to: |
| - | select suitable accounting policies and then apply them consistently; |
| - | make judgements and accounting estimates that are reasonable and prudent; |
| - | state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; |
| - | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
| The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
| The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website. |
| STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
| So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information. |
| AUDITORS |
| The auditors, cbaSadofskys, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
| ON BEHALF OF THE BOARD: |
| Report of the Independent Auditors to the Members of |
| Dr. Reddy's Laboratories (EU) Limited |
| Opinion |
| We have audited the financial statements of Dr. Reddy's Laboratories (EU) Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31st March 2021 which comprise the Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
| In our opinion the financial statements: |
| - | give a true and fair view of the state of the group's and of the parent company affairs as at 31st March 2021 and of the group's profit for the year then ended; |
| - | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
| - | have been prepared in accordance with the requirements of the Companies Act 2006. |
| Basis for opinion |
| We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
| Conclusions relating to going concern |
| In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
| Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. |
| Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
| Other information |
| The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon. |
| Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. |
| In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
| Opinions on other matters prescribed by the Companies Act 2006 |
| In our opinion, based on the work undertaken in the course of the audit: |
| - | the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
| - | the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
| Report of the Independent Auditors to the Members of |
| Dr. Reddy's Laboratories (EU) Limited |
| Matters on which we are required to report by exception |
| In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Directors. |
| We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: |
| - | adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or |
| - | the parent company financial statements are not in agreement with the accounting records and returns; or |
| - | certain disclosures of directors' remuneration specified by law are not made; or |
| - | we have not received all the information and explanations we require for our audit. |
| Responsibilities of directors |
| As explained more fully in the Statement of Directors' Responsibilities, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. |
| In preparing the financial statements, the directors are responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so. |
| Report of the Independent Auditors to the Members of |
| Dr. Reddy's Laboratories (EU) Limited |
| Auditors' responsibilities for the audit of the financial statements |
| Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. |
| Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
| Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows: |
| - the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations; |
| - we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the pharmaceutical industry; |
| - we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, UK tax legislation, and data protection, anti-bribery, employment, environmental, health and safety legislation along with industry specific regulations and requirements such as compliance with regulations set out by the Department of Health and the Medicines and Healthcare products Regulatory Agency (MHRA); |
| - we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and |
| - identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit. |
| We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by: |
| - making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and |
| - considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations. |
| To address the risk of fraud through management bias and override of controls, we: |
| - performed analytical procedures to identify any unusual or unexpected relationships; |
| - tested journal entries to identify unusual transactions; |
| - assessed whether judgements and assumptions made in determining the accounting estimates set out in note 2 were indicative of potential bias; and |
| - investigated the rationale behind significant or unusual transactions. |
| In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to: |
| - agreeing financial statement disclosures to underlying supporting documentation; |
| - reading the minutes of meetings of those charged with governance; |
| - enquiring of management as to actual and potential litigation and claims; and |
| - reviewing correspondence with HMRC, relevant regulators, and the company's legal advisors. |
| There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. |
| Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion. |
| A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
| Report of the Independent Auditors to the Members of |
| Dr. Reddy's Laboratories (EU) Limited |
| Use of our report |
| This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. |
| for and on behalf of |
| Statutory Auditors |
| Princes House |
| Wright Street |
| Hull |
| East Yorkshire |
| HU2 8HX |
| Dr. Reddy's Laboratories (EU) Limited (Registered number: 02177715) |
| Consolidated |
| Statement of Comprehensive |
| Income |
| for the year ended 31st March 2021 |
| 2021 | 2020 |
| Notes | £ | £ | £ | £ |
| TURNOVER | 3 | 58,048,836 | 61,208,480 |
| Cost of sales | 39,032,798 | 38,608,974 |
| GROSS PROFIT | 19,016,038 | 22,599,506 |
| Distribution costs | 774,951 | 645,261 |
| Administrative expenses | 11,819,914 | 11,000,212 |
| 12,594,865 | 11,645,473 |
| 6,421,173 | 10,954,033 |
| Other operating income | 477,033 | 282,897 |
| OPERATING PROFIT | 5 | 6,898,206 | 11,236,930 |
| Interest receivable and similar income | 6 | 642,151 | 485,101 |
| PROFIT BEFORE TAXATION | 7,540,357 | 11,722,031 |
| Tax on profit | 7 | 1,774,726 | 2,347,318 |
| PROFIT FOR THE FINANCIAL YEAR |
| OTHER COMPREHENSIVE INCOME |
| Income tax relating to other comprehensive income |
- |
- |
| OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX |
- |
- |
| TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
5,765,631 |
9,374,713 |
| Profit attributable to: |
| Owners of the parent | 5,765,631 | 9,374,713 |
| Total comprehensive income attributable to: |
| Owners of the parent | 5,765,631 | 9,374,713 |
| Dr. Reddy's Laboratories (EU) Limited (Registered number: 02177715) |
| Consolidated Balance Sheet |
| 31st March 2021 |
| 2021 | 2020 |
| Notes | £ | £ | £ | £ |
| FIXED ASSETS |
| Intangible assets | 9 | 843,644 | 1,198,471 |
| Tangible assets | 10 | 7,896,481 | 9,224,840 |
| Investments | 11 | - | - |
| 8,740,125 | 10,423,311 |
| CURRENT ASSETS |
| Stocks | 12 | 10,823,876 | 8,705,917 |
| Debtors | 13 | 62,011,506 | 54,260,463 |
| Cash at bank and in hand | 2,731,564 | 2,298,802 |
| 75,566,946 | 65,265,182 |
| CREDITORS |
| Amounts falling due within one year | 14 | 20,043,754 | 17,396,995 |
| NET CURRENT ASSETS | 55,523,192 | 47,868,187 |
| TOTAL ASSETS LESS CURRENT LIABILITIES |
64,263,317 |
58,291,498 |
| PROVISIONS FOR LIABILITIES | 17 | 632,783 | 426,595 |
| NET ASSETS | 63,630,534 | 57,864,903 |
| CAPITAL AND RESERVES |
| Called up share capital | 18 | 9,131,928 | 9,131,928 |
| Capital redemption reserve | 19 | 1,362 | 1,362 |
| Other reserves | 19 | 879,601 | 879,601 |
| Retained earnings | 19 | 53,617,643 | 47,852,012 |
| SHAREHOLDERS' FUNDS | 63,630,534 | 57,864,903 |
| The financial statements were approved by the Board of Directors and authorised for issue on 6th May 2021 and were signed on its behalf by: |
| A Walker - Director |
| Dr. Reddy's Laboratories (EU) Limited (Registered number: 02177715) |
| Company Balance Sheet |
| 31st March 2021 |
| 2021 | 2020 |
| Notes | £ | £ | £ | £ |
| FIXED ASSETS |
| Intangible assets | 9 |
| Tangible assets | 10 |
| Investments | 11 |
| CURRENT ASSETS |
| Stocks | 12 |
| Debtors | 13 |
| Cash at bank and in hand |
| CREDITORS |
| Amounts falling due within one year | 14 |
| NET CURRENT ASSETS |
| TOTAL ASSETS LESS CURRENT LIABILITIES |
| PROVISIONS FOR LIABILITIES | 17 |
| NET ASSETS |
| CAPITAL AND RESERVES |
| Called up share capital | 18 |
| Capital redemption reserve | 19 |
| Retained earnings | 19 |
| SHAREHOLDERS' FUNDS |
| Company's profit for the financial year | 3,478,316 | 5,905,240 |
| The financial statements were approved by the Board of Directors and authorised for issue on |
| Dr. Reddy's Laboratories (EU) Limited (Registered number: 02177715) |
| Consolidated Statement of Changes in Equity |
| for the year ended 31st March 2021 |
| Called up | Capital |
| share | Retained | redemption | Other | Total |
| capital | earnings | reserve | reserves | equity |
| £ | £ | £ | £ | £ |
| Balance at 1st April 2019 | 9,131,928 | 38,477,299 | 1,362 | 879,601 | 48,490,190 |
| Changes in equity |
| Total comprehensive income | - | 9,374,713 | - | - | 9,374,713 |
| Balance at 31st March 2020 | 9,131,928 | 47,852,012 | 1,362 | 879,601 | 57,864,903 |
| Changes in equity |
| Total comprehensive income | - | 5,765,631 | - | - | 5,765,631 |
| Balance at 31st March 2021 | 9,131,928 | 53,617,643 | 1,362 | 879,601 | 63,630,534 |
| Dr. Reddy's Laboratories (EU) Limited (Registered number: 02177715) |
| Company Statement of Changes in Equity |
| for the year ended 31st March 2021 |
| Called up | Capital |
| share | Retained | redemption | Total |
| capital | earnings | reserve | equity |
| £ | £ | £ | £ |
| Balance at 1st April 2019 |
| Changes in equity |
| Total comprehensive income | - |
| Balance at 31st March 2020 |
| Changes in equity |
| Total comprehensive income | - |
| Balance at 31st March 2021 |
| Dr. Reddy's Laboratories (EU) Limited (Registered number: 02177715) |
| Consolidated Cash Flow Statement |
| for the year ended 31st March 2021 |
| 2021 | 2020 |
| Notes | £ | £ |
| Cash flows from operating activities |
| Cash generated from operations | 1 | 7,503,179 | 416,298 |
| Tax paid | (1,885,160 | ) | (2,042,649 | ) |
| Net cash from operating activities | 5,618,019 | (1,626,351 | ) |
| Cash flows from investing activities |
| Purchase of intangible fixed assets | (194,636 | ) | (678,331 | ) |
| Purchase of tangible fixed assets | (1,036,391 | ) | (1,370,308 | ) |
| Sale of intangible fixed assets | 85,000 | 241,834 |
| Sale of tangible fixed assets | 4,500 | 451,540 |
| Interest received | 642,151 | 485,101 |
| Net cash from investing activities | (499,376 | ) | (870,164 | ) |
| Cash flows from financing activities |
| Movement in loans to immediate parent | (9,042,480 | ) | 200,552 |
| New loans in year from ultimate parent | 4,013,912 | 1,438,484 |
| Loan repayments from group undertakings | - | 1,954,101 |
| New loans from group undertakings | 342,687 | - |
| Net cash from financing activities | (4,685,881 | ) | 3,593,137 |
| Increase in cash and cash equivalents | 432,762 | 1,096,622 |
| Cash and cash equivalents at beginning of year |
2 |
2,298,802 |
1,202,180 |
| Cash and cash equivalents at end of year | 2 | 2,731,564 | 2,298,802 |
| Dr. Reddy's Laboratories (EU) Limited (Registered number: 02177715) |
| Notes to the Consolidated Cash Flow Statement |
| for the year ended 31st March 2021 |
| 1. | RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
| 2021 | 2020 |
| £ | £ |
| Profit before taxation | 7,540,357 | 11,722,031 |
| Depreciation charges | 1,586,941 | 1,532,937 |
| Loss/(profit) on disposal of fixed assets | 92,202 | (4,000 | ) |
| Finance income | (642,151 | ) | (485,101 | ) |
| 8,577,349 | 12,765,867 |
| (Increase)/decrease in stocks | (2,117,959 | ) | 2,033,134 |
| Decrease/(increase) in trade and other debtors | 2,478,727 | (14,831,994 | ) |
| (Decrease)/increase in trade and other creditors | (1,434,938 | ) | 449,291 |
| Cash generated from operations | 7,503,179 | 416,298 |
| 2. | CASH AND CASH EQUIVALENTS |
| The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts: |
| Year ended 31st March 2021 |
| 31/3/21 | 1/4/20 |
| £ | £ |
| Cash and cash equivalents | 2,731,564 | 2,298,802 |
| Year ended 31st March 2020 |
| 31/3/20 | 1/4/19 |
| £ | £ |
| Cash and cash equivalents | 2,298,802 | 1,202,180 |
| 3. | ANALYSIS OF CHANGES IN NET FUNDS |
| At 1/4/20 | Cash flow | At 31/3/21 |
| £ | £ | £ |
| Net cash |
| Cash at bank and in hand | 2,298,802 | 432,762 | 2,731,564 |
| 2,298,802 | 432,762 | 2,731,564 |
| Total | 2,298,802 | 432,762 | 2,731,564 |
| Dr. Reddy's Laboratories (EU) Limited (Registered number: 02177715) |
| Notes to the Consolidated Financial Statements |
| for the year ended 31st March 2021 |
| 1. | STATUTORY INFORMATION |
| Dr. Reddy's Laboratories (EU) Limited is a |
| The presentation currency of the financial statements is the Pound Sterling (£). |
| The company's main places of business are: |
| Steanard Lane, Mirfield |
| Cambridge Science Park, Cambridge |
| 2. | ACCOUNTING POLICIES |
| Basis of preparing the financial statements |
| Turnover |
| Turnover is the amount derived from ordinary activities, and stated after trade discounts, other sales tax and net of VAT. |
| Interest received |
| Interest received is accounted for when it is received. |
| Royalty income |
| Royalty income is accounted for when it is received. |
| Dividends received |
| Dividends received from subsidiary undertakings are accounted for when they are received. |
| Goodwill |
| Intangible assets |
| Products using patents are capitalised at the date of the patent. The residual value of these patents are being amortised evenly over their estimated useful lives. |
| Tangible fixed assets |
| Freehold property | - |
| Improvements to property | - |
| Plant and machinery | - |
| Fixtures and fittings | - |
| Computer equipment | - |
| Land is not depreciated |
| Investments in subsidiaries |
| Investments in subsidiary undertakings are recognised at cost less any impairments. |
| Dr. Reddy's Laboratories (EU) Limited (Registered number: 02177715) |
| Notes to the Consolidated Financial Statements - continued |
| for the year ended 31st March 2021 |
| 2. | ACCOUNTING POLICIES - continued |
| Stocks |
| Stocks and work in progress are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. |
| Cost is calculated using the first-in, first-out method and includes all purchase, transport, and handling costs in bringing stocks to their present location and condition. |
| Taxation |
| Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
| Current or deferred taxation assets and liabilities are not discounted. |
| Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
| Deferred tax |
| Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. |
| Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
| Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
| Research and development |
| Expenditure on research and development is written off in the year in which it is incurred. Any expenditure of a capital nature is capitalised in the balance sheet and depreciated in line with the above note on tangible fixed assets. |
| Foreign currencies |
| Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result. |
| Hire purchase and leasing commitments |
| Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease. |
| Pension costs and other post-retirement benefits |
| The group makes contributions to the private pension funds of directors and staff. Contributions payable for the year are charged in the profit and loss account. |
| Patents were valued at cost as of the date at which the patent was first filed and amortised on a straight line basis over their useful economic lives. |
| Dr. Reddy's Laboratories (EU) Limited (Registered number: 02177715) |
| Notes to the Consolidated Financial Statements - continued |
| for the year ended 31st March 2021 |
| 2. | ACCOUNTING POLICIES - continued |
| The company has the long term support from the group and as a consequence, the directors believe that the company is well placed to manage its business risks successfully despite the uncertain economic outlook. |
| The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis in preparing the annual financial statements. |
| Further information regarding the company's business activities, together with the factors likely to affect its future development, performance and position is set out in the Strategic Report. |
| Stock based compensation |
| The stock options taken up in the ultimate parent company, Dr Reddy's Laboratories Limited, by staff members of subsidiary companies are accounted for in the accounts of the subsidiary company. |
| 3. | TURNOVER |
| The turnover and profit before taxation are attributable to the one principal activity of the group. |
| An analysis of turnover by geographical market is given below: |
| 2021 | 2020 |
| £ | £ |
| United Kingdom | 34,142,159 | 30,497,887 |
| Europe and other countries | 23,906,677 | 30,710,593 |
| 58,048,836 | 61,208,480 |
| 4. | EMPLOYEES AND DIRECTORS |
| 2021 | 2020 |
| £ | £ |
| Wages and salaries | 10,390,718 | 10,275,268 |
| Social security costs | 294,454 | 279,239 |
| Other pension costs | 219,797 | 183,115 |
| 10,904,969 | 10,737,622 |
| The average number of employees during the year was as follows: |
| 2021 | 2020 |
| Dr Reddy's Laboratories (UK) Limited | 68 | 76 |
| Dr Reddy's Laboratories (EU) Limited | 116 | 114 |
| The average number of employees by undertakings that were proportionately consolidated during the year was |
| 2021 | 2020 |
| £ | £ |
| Directors' remuneration | 139,531 | 192,365 |
| Dr. Reddy's Laboratories (EU) Limited (Registered number: 02177715) |
| Notes to the Consolidated Financial Statements - continued |
| for the year ended 31st March 2021 |
| 4. | EMPLOYEES AND DIRECTORS - continued |
| The number of directors to whom retirement benefits were accruing was as follows: |
| Money purchase schemes | 1 | 1 |
| 5. | OPERATING PROFIT |
| The operating profit is stated after charging/(crediting): |
| 2021 | 2020 |
| £ | £ |
| Hire of plant and machinery | 73,384 | 67,601 |
| Depreciation - owned assets | 1,214,680 | 1,221,832 |
| Loss/(profit) on disposal of fixed assets | 92,202 | (4,000 | ) |
| Patents and licences amortisation | 372,261 | 311,105 |
| Auditors' remuneration | 12,850 | 12,800 |
| Auditors' remuneration for non audit work | 15,350 | 11,400 |
| Foreign exchange differences | 627,987 | (49,473 | ) |
| Stock based compensation | 32,745 | 12,924 |
| Interest on group loans | (619,710 | ) | (470,898 | ) |
| 6. | INTEREST RECEIVABLE AND SIMILAR INCOME |
| 2021 | 2020 |
| £ | £ |
| Deposit account interest | 208,127 | 12,784 |
| Corporation tax interest received | - | 1,419 |
| Interest on group loans | 432,018 | 470,898 |
| Corporation tax interest received | 2,006 | - |
| 642,151 | 485,101 |
| 7. | TAXATION |
| Analysis of the tax charge |
| The tax charge on the profit for the year was as follows: |
| 2021 | 2020 |
| £ | £ |
| Current tax: |
| UK corporation tax | 1,568,538 | 2,205,522 |
| Deferred taxation | 206,188 | 141,796 |
| Tax on profit | 1,774,726 | 2,347,318 |
| UK corporation tax has been charged at 19 % (2020 - 19 %). |
| Dr. Reddy's Laboratories (EU) Limited (Registered number: 02177715) |
| Notes to the Consolidated Financial Statements - continued |
| for the year ended 31st March 2021 |
| 7. | TAXATION - continued |
| Reconciliation of total tax charge included in profit and loss |
| The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
| 2021 | 2020 |
| £ | £ |
| Profit before tax | 7,540,357 | 11,722,031 |
| Profit multiplied by the standard rate of corporation tax in the UK of 19 % (2020 - 19 %) |
1,432,668 |
2,227,186 |
| Effects of: |
| Expenses not deductible for tax purposes | 14,977 | 20,734 |
| Capital allowances in excess of depreciation | - | (42,196 | ) |
| Depreciation in excess of capital allowances | 128,186 | - |
| ESOP Exercised in the year | - | (202 | ) |
| Depreciation of non-qualifying assets | 15,187 | - |
| Deferred taxation movement | - | 141,796 |
| Stock based compensation | 4,607 | - |
| Impairment of non-qualifying assets | 179,101 | - |
| Total tax charge | 1,774,726 | 2,347,318 |
| Tax effects relating to effects of other comprehensive income |
| 2020 |
| Gross | Tax | Net |
| £ | £ | £ |
| Stock based compensation |
| 8. | INDIVIDUAL STATEMENT OF COMPREHENSIVE INCOME |
| As permitted by Section 408 of the Companies Act 2006, the Statement of Comprehensive Income of the parent company is not presented as part of these financial statements. |
| Dr. Reddy's Laboratories (EU) Limited (Registered number: 02177715) |
| Notes to the Consolidated Financial Statements - continued |
| for the year ended 31st March 2021 |
| 9. | INTANGIBLE FIXED ASSETS |
| Group |
| Patents |
| and |
| Goodwill | licences | Totals |
| £ | £ | £ |
| COST |
| At 1st April 2020 | 1,015,227 | 6,073,637 | 7,088,864 |
| Additions | - | 194,636 | 194,636 |
| Disposals | - | (295,467 | ) | (295,467 | ) |
| At 31st March 2021 | 1,015,227 | 5,972,806 | 6,988,033 |
| AMORTISATION |
| At 1st April 2020 | 1,015,227 | 4,875,166 | 5,890,393 |
| Amortisation for year | - | 372,261 | 372,261 |
| Eliminated on disposal | - | (118,265 | ) | (118,265 | ) |
| At 31st March 2021 | 1,015,227 | 5,129,162 | 6,144,389 |
| NET BOOK VALUE |
| At 31st March 2021 | - | 843,644 | 843,644 |
| At 31st March 2020 | - | 1,198,471 | 1,198,471 |
| Company |
| Patents |
| and |
| Goodwill | licences | Totals |
| £ | £ | £ |
| COST |
| At 1st April 2020 |
| Additions |
| At 31st March 2021 | 1,015,227 | 4,180,507 | 5,195,734 |
| AMORTISATION |
| At 1st April 2020 |
| Amortisation for year |
| At 31st March 2021 |
| NET BOOK VALUE |
| At 31st March 2021 |
| At 31st March 2020 |
| Dr. Reddy's Laboratories (EU) Limited (Registered number: 02177715) |
| Notes to the Consolidated Financial Statements - continued |
| for the year ended 31st March 2021 |
| 10. | TANGIBLE FIXED ASSETS |
| Group |
| Improvements |
| Freehold | to | Plant and |
| property | property | machinery |
| £ | £ | £ |
| COST |
| At 1st April 2020 | 4,566,866 | 218,348 | 19,413,483 |
| Additions | - | - | 868,393 |
| Disposals | - | - | (425,733 | ) |
| Impairments | (1,365,649 | ) | - | (3,210,599 | ) |
| At 31st March 2021 | 3,201,217 | 218,348 | 16,645,544 |
| DEPRECIATION |
| At 1st April 2020 | 1,167,024 | 217,987 | 13,878,889 |
| Charge for year | 86,861 | - | 1,012,857 |
| Eliminated on disposal | - | - | (425,733 | ) |
| Impairments | (423,011 | ) | - | (3,024,880 | ) |
| At 31st March 2021 | 830,874 | 217,987 | 11,441,133 |
| NET BOOK VALUE |
| At 31st March 2021 | 2,370,343 | 361 | 5,204,411 |
| At 31st March 2020 | 3,399,842 | 361 | 5,534,594 |
| Fixtures |
| and | Computer |
| fittings | equipment | Totals |
| £ | £ | £ |
| COST |
| At 1st April 2020 | 1,784,376 | 606,723 | 26,589,796 |
| Additions | 4,405 | 163,593 | 1,036,391 |
| Disposals | (4,500 | ) | - | (430,233 | ) |
| Impairments | (553,067 | ) | - | (5,129,315 | ) |
| At 31st March 2021 | 1,231,214 | 770,316 | 22,066,639 |
| DEPRECIATION |
| At 1st April 2020 | 1,550,108 | 550,948 | 17,364,956 |
| Charge for year | 57,017 | 57,945 | 1,214,680 |
| Eliminated on disposal | - | - | (425,733 | ) |
| Impairments | (535,854 | ) | - | (3,983,745 | ) |
| At 31st March 2021 | 1,071,271 | 608,893 | 14,170,158 |
| NET BOOK VALUE |
| At 31st March 2021 | 159,943 | 161,423 | 7,896,481 |
| At 31st March 2020 | 234,268 | 55,775 | 9,224,840 |
| Net book value at 31st March 2021 includes Assets held for resale of £1.5m. |
| Dr. Reddy's Laboratories (EU) Limited (Registered number: 02177715) |
| Notes to the Consolidated Financial Statements - continued |
| for the year ended 31st March 2021 |
| 10. | TANGIBLE FIXED ASSETS - continued |
| Company |
| Fixtures |
| Freehold | Plant and | and | Computer |
| property | machinery | fittings | equipment | Totals |
| £ | £ | £ | £ | £ |
| COST |
| At 1st April 2020 |
| Additions |
| Disposals | ( |
) | ( |
) |
| At 31st March 2021 |
| DEPRECIATION |
| At 1st April 2020 |
| Charge for year |
| At 31st March 2021 |
| NET BOOK VALUE |
| At 31st March 2021 |
| At 31st March 2020 |
| 11. | FIXED ASSET INVESTMENTS |
| Group |
| Shares in |
| group |
| undertaking |
| £ |
| COST |
| At 1st April 2020 |
| and 31st March 2021 | 2,768,570 |
| PROVISIONS |
| At 1st April 2020 |
| and 31st March 2021 | 2,768,570 |
| NET BOOK VALUE |
| At 31st March 2021 | - |
| At 31st March 2020 | - |
| Dr. Reddy's Laboratories (EU) Limited (Registered number: 02177715) |
| Notes to the Consolidated Financial Statements - continued |
| for the year ended 31st March 2021 |
| 11. | FIXED ASSET INVESTMENTS - continued |
| Company |
| Shares in |
| group |
| undertaking |
| £ |
| COST |
| At 1st April 2020 |
| and 31st March 2021 |
| PROVISIONS |
| At 1st April 2020 |
| and 31st March 2021 | 2,633,179 |
| NET BOOK VALUE |
| At 31st March 2021 |
| At 31st March 2020 |
| The group or the company's investments at the Balance Sheet date in the share capital of companies include the following: |
| Subsidiaries |
| Registered office: 6 Riverview Road, Beverley, East Yorkshire, HU17 0LD |
| Nature of business: |
| % |
| Class of shares: | holding |
| 2021 | 2020 |
| £ | £ |
| Aggregate capital and reserves |
| Profit for the year |
| Registered office: Chirotech Technology Centre, 410 Cambridge Science Park, Milton Road, Cambridge, CB4 0PE |
| Nature of business: |
| % |
| Class of shares: | holding |
| 2021 | 2020 |
| £ | £ |
| Aggregate capital and reserves |
| (Loss)/profit for the year | ( |
) |
| Dr. Reddy's Laboratories (EU) Limited (Registered number: 02177715) |
| Notes to the Consolidated Financial Statements - continued |
| for the year ended 31st March 2021 |
| 12. | STOCKS |
| Group | Company |
| 2021 | 2020 | 2021 | 2020 |
| £ | £ | £ | £ |
| Raw materials | 365,511 | 576,282 |
| Packing materials | 41,617 | 239,935 |
| Work-in-progress | 1,972,281 | 2,163,715 |
| Finished goods | 8,444,467 | 5,725,985 |
| 10,823,876 | 8,705,917 |
| 13. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
| Group | Company |
| 2021 | 2020 | 2021 | 2020 |
| £ | £ | £ | £ |
| Trade debtors | 14,153,808 | 16,889,823 |
| Amounts due from ultimate |
| parent | 1,408,583 | - | - | - |
| Amounts owed by group undertakings | - | 2,328,486 |
| Other debtors | 11,857 | 2,616 |
| Amounts due from immediate |
| parent | 45,264,814 | 34,114,884 |
| Taxation | 530,994 | 288,722 |
| VAT | 349,958 | 326,946 |
| Prepayments and accrued income | 291,492 | 237,162 |
| R&D tax credits receivable | - | 71,824 | - | - |
| 62,011,506 | 54,260,463 |
| 14. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
| Group | Company |
| 2021 | 2020 | 2021 | 2020 |
| £ | £ | £ | £ |
| Trade creditors | 2,554,853 | 2,404,936 |
| Amounts owed to group undertakings | 590,933 | - |
| Amounts owed to ultimate parent | 11,149,708 | 7,384,042 | - | - |
| Amounts owed to immediate parent | - | 200,552 | - | - |
| Taxation | 354,671 | 429,021 |
| Social security and other taxes | 181,685 | 486,106 |
| Other creditors | 318,004 | 28,723 |
| Payment in advance | 875,000 | 875,000 |
| Accrued expenses | 3,985,511 | 5,573,398 |
| Deferred income | 33,389 | 15,217 | - | - |
| 20,043,754 | 17,396,995 |
| 15. | LEASING AGREEMENTS |
| Minimum lease payments fall due as follows: |
| Dr. Reddy's Laboratories (EU) Limited (Registered number: 02177715) |
| Notes to the Consolidated Financial Statements - continued |
| for the year ended 31st March 2021 |
| Group |
| Non-cancellable operating | leases |
| 2021 | 2020 |
| £ | £ |
| Within one year | 1,082,697 | 1,084,699 |
| Between one and five years | 1,090,169 | 1,112,402 |
| In more than five years | - | 8,835 |
| 2,172,866 | 2,205,936 |
| Company |
| Non-cancellable operating | leases |
| 2021 | 2020 |
| £ | £ |
| Within one year |
| Between one and five years |
| In more than five years |
| 16. | SECURED DEBTS |
| Bank loans have been secured against the assets of the immediate parent company. |
| 17. | PROVISIONS FOR LIABILITIES |
| Group | Company |
| 2021 | 2020 | 2021 | 2020 |
| £ | £ | £ | £ |
| Deferred tax |
| Accelerated capital allowances | 632,783 | 426,595 |
| Group |
| Deferred |
| tax |
| £ |
| Balance at 1st April 2020 | 426,595 |
| Charge to Statement of Comprehensive Income during year | 206,188 |
| Balance at 31st March 2021 | 632,783 |
| Company |
| Deferred |
| tax |
| £ |
| Balance at 1st April 2020 |
| Charge to Statement of Comprehensive Income during year |
| Balance at 31st March 2021 |
| Dr. Reddy's Laboratories (EU) Limited (Registered number: 02177715) |
| Notes to the Consolidated Financial Statements - continued |
| for the year ended 31st March 2021 |
| 18. | CALLED UP SHARE CAPITAL |
| Allotted, issued and fully paid: |
| Number: | Class: | Nominal | 2021 | 2020 |
| value: | £ | £ |
| Ordinary | £1 |
| 19. | RESERVES |
| Group |
| Capital |
| Retained | redemption | Other |
| earnings | reserve | reserves | Totals |
| £ | £ | £ | £ |
| At 1st April 2020 | 47,852,012 | 1,362 | 879,601 | 48,732,975 |
| Profit for the year | 5,765,631 | 5,765,631 |
| At 31st March 2021 | 53,617,643 | 1,362 | 879,601 | 54,498,606 |
| Company |
| Capital |
| Retained | redemption |
| earnings | reserve | Totals |
| £ | £ | £ |
| At 1st April 2020 | 15,878,108 |
| Profit for the year |
| At 31st March 2021 | 19,356,424 |
| 20. | ULTIMATE PARENT COMPANY |
| The company's ultimate parent company is Dr Reddy's Laboratories Limited, a company registered in India. The group financial statements are available to the public and may be obtained from Door No 8-2-337, Road No 3, Banjara Hills, Hyderabad - 500034, India. |
| The company's immediate parent company is Dr Reddy's Laboratories SA, a company registered in Switzerland. The group financial statements are available to the public and may be obtained from Hauptstrasse 62, Binningen, CH, 4102, Other, Switzerland. |
| Dr. Reddy's Laboratories (EU) Limited (Registered number: 02177715) |
| Notes to the Consolidated Financial Statements - continued |
| for the year ended 31st March 2021 |
| 21. | RELATED PARTY DISCLOSURES |
| During the year the group purchased goods from the following related parties: |
| 2021 | 2020 |
| £ | £ |
| Dr Reddy's Laboratories Limited | 17,516,550 | 15,477,898 |
| Industrias Quimicas Falcon | 63,520 | 140,924 |
| Dr Reddy's Switzerland | 213,526 | 200,552 |
| Reddy's Pharma SAS | 461,476 | - |
| During the year the group made sales to the following related parties: |
| 2021 | 2020 |
| £ | £ |
| Dr Reddy's Laboratories Limited | 199,266 | 532,239 |
| Dr Reddy's Laboratories Inc | - | - |
| Betapharm Arzneimittel GmbH | 607,382 | 71,803 |
| Reddy's Pharma SAS | - | 290,260 |
| Dr Reddy's Laboratories S.R.L | (93,477 | ) | (167,828 | ) |
| Dr Reddy's Pharma Iberia | 105,400 | (4,264 | ) |
| During the year the group sold QC services to the following related parties: |
| 2021 | 220 |
| £ | £ |
| Betapharm Arzneimittel GmbH | - | 15,934 |
| During the year the group received royalty income from the following related parties: |
| 2021 | 2020 |
| £ | £ |
| Dr Reddy's Switzerland | 75,624 | 40,186 |
| During the year the group had given loans to the following related parties: |
| 2021 | 2020 |
| £ | £ |
| Dr Reddy's Switzerland | 11,150,000 | 14,400,000 |
| During the year the group charged interest on loans to the following related parties: |
| 2021 | 2020 |
| £ | £ |
| Dr Reddy's Switzerland | 619,710 | 470,898 |
| During the year the group recharged for projects to the following relates parties: |
| 2020 | 2020 |
| £ | £ |
| Dr Reddy's Laboratories Limited | 4,868,504 | 4,805,539 |
| At the balance sheet date, the group was owed amounts from the following related parties: |
| 2021 | 2020 |
| £ | £ |
| Dr Reddy's Laboratories Limited | 1,402,020 | 2,053,957 |
| Dr Reddy's Switzerland | 45,264,814 | 34,114,884 |
| Dr Reddy's Laboratories S.R.L | (84,617 | ) | (162,670 | ) |
| Betapharm Arzneimittel GmbH | 67,115 | 15,934 |
| Dr Reddy's Pharma Iberia | 33,191 | 421,265 |
| At the balance sheet date, the group owed amounts to the following related parties: |
| 2021 | 2020 |
| Dr. Reddy's Laboratories (EU) Limited (Registered number: 02177715) |
| Notes to the Consolidated Financial Statements - continued |
| for the year ended 31st March 2021 |
| £ | £ |
| Dr Reddy's Laboratories Limited | 11,149,708 | 7,319,655 |
| Dr Reddy's Switzerland | - | 200,552 |
| Dr Reddy's Laboratories Inc | 131,548 | 14,609 |
| Reddy Pharma SAS | 459,849 | 49,778 |